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October 26, 2005

Panel ponders selling govt. land for mining

by Sam Savage

By Lisa Lambert

WASHINGTON (Reuters) - The U.S. House Resources Committee
was to consider a budget package on Wednesday that would revise
the nation's 1872 mining law and end a ban on the sale of
public land to mining companies.

Environmental groups criticized the proposal, saying it
would let mining companies buy Western land at fire-sale prices
as part of a budget plan to raise funds and cut federal
spending.

For the past decade, Congress has barred selling
government-owned land for mining, which had been allowed under
an antiquated law that set prices at just $2.50 to $5 per acre.

Republican Richard Pombo of California, chairman of the
House panel, proposed allowing sales to resume for $1,000 per
acre. The committee will debate the proposal, along with other
oil and natural gas measures in a budget package that Pombo
says would raise at least $2.4 billion over five years for the
federal government.

Congress is trying to wrap up work this month on broad
government-wide budget cuts to rein in spending and the federal
deficit.

The National Mining Association, which represents mining
companies, said it supported the plan. Companies would be
allowed to mine in desirable areas, but for a higher cost.

"No one likes to see their cost of business increase, but
the federal treasury needs the money and we need the
certainty," said Luke Popovich, a spokesman for the industry
group. He estimated that buying the land and paying related
fees would cost the industry about $151 million over the next
five years.

When the U.S. moratorium began in 1995, Popovich said,
minerals commanded lower prices.

"Since then, we've had a boom in commodity prices," he
said. "We've had rapidly accelerating prices for copper, for
gold, and for other minerals that we get largely from federal
land."

It is because of this boom that environmental groups say
the land is worth more than the $1,000 per acre rate, Pombo
suggested.

Lauren Pagel, legislative coordinator for Earthworks, said
that with gold selling for more than $460 an ounce in New York
and London, the $1,000 per acre rate is "pretty cheap."

"It's still way below market value for those lands. It
still allows huge chunks of our national treasures to be
privatized," Pagel said.

Calling the proposed legislation a "Trojan Horse," Pagel
said that House members are pulling mining issues from public
view by trying to fold a significant policy change into budget
legislation.

"In reality, with this budget reconciliation bill, it
doesn't get as much debate as a real bill to reform the mining
law," Pagel said. "This is something Congress is doing to raise
revenue."